For general discussions of term structure theory, see [1-3]. Critical analyses of the expections explanation are contained in [4] and [5]. The liquidity preference explanation is explored in [6] Immunization in a term structure environment was originated in [7]

1. Fabozzi, F J, and F Modigliani (1992), Capital Markets. Institutions and Instruments, Prentice Hail, Englewood Cliffs, N.J

2 Homer, S , and M Liebowitz (1972), Inside the Yield Book New Tools for Bond Market

Strategy, Prentice Hall, Englewood Cliffs, NI.

3 Van Home, .1 C (1990), Financial Market Rates tfe flows, Prentice Hall, Englewood

Cliffs, NX

4 Russell, S (July/August 1992), "Understanding the Term Structure of Interest Rates: The

Expectations Theory," Federal Reserve Bank of St Louis Review, 36-51

5 Cox, I, J Ingersoll, and S Ross (September 1981), "A Reexamination of Traditional

Hypotheses about the Term Structure of Interest Rates," fou mal of Finance, 36, 769-99

6 Fama, E (1984), "The Information in the Term Structure," Journal of Financial Economics,

13, 509-28

7 Fisher, L„ and R L Weil (October 1977), "Coping with the Risk of Market-Rate Fluctua tions: Returns to Bondholders from Naive and Optimal Strategies," Journal of Business, 44, 408-431

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